“The aging of one of the country’s largest generations, Baby Boomers, will have a lasting impact on the automotive market, especially because Millennials and Generation X are not taking to automobiles or the open road in as great as numbers as Boomers did. The silver lining here is that Boomers are not their father's generation. They expect to continue driving long into their later years. The challenge here is for automakers to develop models that cater to the specific needs of this aging population, without alienating them or younger cohorts.”

– Colin Bird, Automotive Analyst

Some questions answered in this report include:

• How should manufacturers and dealers address the impact on the car-buying landscape of aging Baby Boomers?• How can dealerships change to improve their poor perception among car buyers?

This report explores the car buying market in the U.S. It provides insight into the external and internal factors affecting sales, marketing and promotional campaigns, and industry innovations. Segmentation data and analysis cover three segments: new vehicle sales (new passenger car vs. light truck sales), used or pre-owned vehicles, and certified pre-owned (CPO) vehicles. In 2012, sales of new, used and CPO vehicles increased for the third consecutive year, with approximately 55 million vehicles sold. More modest gains are expected in the foreseeable future, due to looser consumer credit requirements and more consistently predicable residual values.

Major themes throughout this report include: the release of pent-up demand, consumer’s high anxiety towards the car shopping process, and disdain among consumers as it pertains to the current business format of automotive distribution. This report analyses and examines how automakers, car dealerships, and affiliated mediums could take advantage of this pent-up demand. It also discusses which types of websites car buyers visit and if consumers plan to stay loyal to their current car dealerships and automakers.

For the purposes of this report, Mintel has used the following definitions:

“Car buying” is defined as the act, or the intended act, of the consumer to purchase a new, used non-certified, or certified per-owned used car. For the purposes of this report, a “new” car will mean any new vehicle which has never been titled or registered and that has been driven less than 7,500 miles before first-title. A “used” or pre-owned, non-certified car is any vehicle that has been previously owned and titled by at least one prior owner; the car must be operational, any car sold as scrap or for its parts and not as an operating vehicle is not considered used or pre-owned. A “certified pre-owned” car is any well maintained, late-model, used vehicle which has been inspected and refurbished by its original manufacturer or dealer; certified pre-owned vehicles typically include warranties, and other additional benefits typically bestowed only to new cars, but this isn’t necessarily required.

“Car,” as defined for the purposes of this report, covers any of the following vehicles that are bought through retail channels and are intended for non-commercial use: subcompact-, compact-, mid-, or full-sized sedans, hatchbacks, or convertibles; compact-, mid-, or full-sized truck-based SUVs; compact-, mid- or full-sized car-based crossovers; minivans or MPVs; compact-, mid-, or full-sized pickup trucks or vans; any type of hybrid electric, electric, or alternatively fueled vehicle; any type of luxury vehicle; any type of classic car; or any variation above, so long as it’s for non-commercial use. Large trucks and recreational vehicles are not covered, regardless of use type. This report also does not cover private, or by-owner, vehicle purchases or sales, regardless of vehicle, or use type.

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Table of contents

Scope and Themes

What you need to know

Definition

Data sources

Sales data

Consumer survey data

Advertising creative

Abbreviations and terms

Abbreviations

Terms

Executive Summary

The market

Figure 1: U.S. unit sales of new vs. used vehicles, 2007-12

Market factors

Release of pent-up demand creates short-term boost in new car sales

Figure 2: Total new vehicles sold, new cars vs. light trucks, 2007-12

Aging US car parc will impact sales of new and used cars

Figure 3: Average age of cars, light trucks and total light vehicles, 1995-2011

Total U.S. new car dealership network grows for first time in seven years

Figure 4: Number of dealerships selling new cars, 2003-12

Key player

Top 10 automakers account for 92% of 2012 new vehicle sales

Figure 5: Largest automotive original equipment manufacturers in the U.S., by new car market share, 2012